Tue Oct 21, 2008 at 17:00

For the first time ever in U.S. history, the candidates for president have raised more than $1 billion. To find out where all this money is coming from, click on the candidates' names below and explore the options to the left.[...]

Never mind that the figures don't include September's haul, the problem here is the pervasive economic sin of doing absolute value comparisons between eras.

It's the same silly reason that All Time Box Office lists like this one make it appear that Titanic and Pirates of the Caribbean did better at the box office than E.T. or Gone With The Wind. It's easy to top the list with the same number of ticket sales at say $14/person versus the $2-4 it probably cost to see a movie in 1982. I'm pretty sure the concept of inflation is now considered common knowledge so I think it's time we stop pretending it doesn't exist.

From Conscience of a Liberal (2007), pp22-23, while explaining the conservative Republican dominance of the Presidency from the end of the Civil War to basically FDR, Krugman reveals:

Then there was the matter of campaign finance, whose force was most vividly illustrated in the 1896 election, arguably the only time between the Civil War and 1932 that a challenger to the country's ruling economic elite had a serious chance of winning the White House. Fearful of what William Jennings Bryan might do, the wealthy didn't crucify him on a cross of gold--they buried him under a mountain of the stuff. William McKinley's 1896 campaign spent $3.35 million, almost twice as much s the Republicans had spent in 1892, and five times what Bryan had at his disposal. And bear in mind that in 1896 three million dollars was a lot of money: As a percentage of gross domestic product, it was the equivalent of more than $3 billion today, five times what the Bush campaign spent in 2004. The financial disparity between the parties in 1896 was exceptional, but the Republicans normally had a large financial advantage. The only times the Democrats were more or less financially competitive between the Civil War and Woodrow Wilson's election in 1912 were in 1876, an election in which the Democrat Samuel Tilden actually won the popular vote (and essentially had the electoral vote stolen, in a deal in which Rutherford B. Hayes got the White House in return for his promise to withdraw federal troops from the South), and in Grover Cleveland's two victories in 1884 and 1892. Not coincidentally Tilden and Cleveland were Bourbon Democrats. When the Democratic Party nominated someone who wasn't a Bourbon, it was consistently outspent about three to one.

Krugman doesn't say if that is the most expensive election ever, but if it isn't, it's got to be in the top few. And that $3.3M was just the Republicans, this current election's $1B is all candidates from both parties (including Primaries I think, since the chart they show doesn't add up to $1B, even if you include McCain and Obama's September results).

Why This Matters

First off, this is part of the unnecessary and erroneous oversimplification of economic concepts in the discourse. And I'm not picking on Opensecrets.org here, there are other examples of this, and it the absolute cost of the 2004 election was also a subject of breathless wonder. Calculating the relative values between different eras may not be trivial for non-economists, but the media need to start doing it more (and I expect there is software for this anyway). We need smarter economics from our leaders, and part of getting there is not dumbing down the economic discourse to the point where it actually becomes objectively wrong. As Einstein supposedly said "Everything should be made as simple as possible, but not simpler."

Secondly, with McCain already talking about campaign finance reform after Obama's $150M September, this notion that election spending is "out of control" will of course be abused by Republicans to push for "reform" crafted to hurt Democratic fund raising. Obama is doing spectacularly with the small dollar donors and it's great to see, but the plutocrats of the gilded age have him beat. And they might have beat their old record this time if not for the donation limits which I presume did not exist in 1896.

Finally, some in the netroots think campaign finance limits achieve nothing since the rich have various other ways of using their money to achieve political ends, but I say this stands in contrast to that idea. The Scaife types can fund foundations and think-tanks, but I suspect just straight out buying elections à la 1896 is probably easier and more appealing to the kleptocrats. The laws may not achieve their ideal desired end, but even blunting the ability of billionaires to drown out more populist politicians is worth doing.

$150 million in one month is a frightening amount of money. It occurs to me that the reasons the figure is so high are because Bush has been so dismal, and the economy is scary - but it is still a disturbing development.

Any hyperbole or ignorance in claiming it is the most expensive "ever" is a minor point.

No, it's not silly if you try and compare apples to apples. You can't look at absolute figures, but also account for the size of the US economy by comparing to GDP or another aggregate metric. Krugman doesn't show his math for the $3B figure, but assuming he is correct, it means the 1896 election spent over 3 times what this one will as a proportion of GDP.

The absolute dollar figures did go up, particularly in 1988 and 2004, but then GDP also has grown faster than inflation for many years. If the economy grows 10% in a 2% inflation environment, all else being equal election spending should go up more than inflation and not represent anything but "keeping pace."

And a large increase in e-spending between 1976 and 2008 is certainly worth discussion, but that's not my point. 1896 still represents more by the way economists measure these things.

If we can't compare eras, then there's no point making any statements like "most expensive election ever" since that is a comparison between eras.

By my calculation, 1976's 66.9M spending would equate to roughly 530M today, taking both inflation and GDP growth into account. I could be doing the math all wrong, but comparing 500M to $1B is a lot more defensible than looking at 66M to $1B which is what most of these kinds of stories do.

In 1896, the expenses were print - whether it be pamphlets or newspapers - travel, probably paid surrogates, staging events, and travel for the candidates. The 1986 election was staffed by an unheard of army of 1400 full-timers:

My guess is that the expenses for campaigns declined as mass media entered the picture. Radio is a cheap medium, and probably was quite a bit cheaper than print. Now we've reached a point where media saturation is the goal, and media buys are accordingly extremely expensive.

I think comparing 1986 to 2008 is ludricrious. Comparing modern campaigns is entirely sensible.

But, in comparing modern campaigns, the only important variable is inflation. GDP should have little to do with it. This isn't like cars, where unit sales rise with wealth. Certainly increased wealth could equate with having some spare money to donate, but we are still electing one president. It's one product: it's price should reflect inflation, not much more.

Many years ago I read in a biography of William Jennings Bryan that McKinley's campaign spent $8 million (not $3.3 million) and that the majority of the money went to either intimidating or bribing voters in the key Midwest states, Bryan spent $500,000 giving McKinley a 16-1 spending edge.

Routine practices of the time included the wide spread posting of signs by facroty owners stating that the factory would "be closed tomorrow" if Bryan won.

Bryan was only 36 at the time, easily the youngest major party Presidential nominee ever. And yes, I read the bio after watching Inherit the Wind on TV.

Dunno for sure how the average Joe (not the wannabe plumber) will react on this argument, but I somehow have the feeling that this will look like a ridiculous comparison to him - '18effing96? You're joking, right? Wtf?'

It would be good if there was a post war example that translated into higher costs. If there isn't, this is useless. Maybe then it would be better to compare it with the costs of the Iraq war: "One Day = $720 Million"
http://www.youtube.com/watch?v...

A tagline could be: How much is it worth to get to an end of this idiocy?

If 1896 is "too long ago" to make comparisons, fine, but then no one should write articles saying "the most EXPENSIVE EVARRR!" since "ever" means "since 1776" to most people, including average Joe. Say "since WWII" or "Since television" if you want to confine the analysis.

But forget average joe - what do you think? Do you not find it valuable to know in the Gilded Age the rich "buried" progressive candidates like this? There's a reason FDR's presidency is such a big deal, once-in-a-lifetime type event, and this gives us some perspective what happened to previous Democrats who tried to address the inequities.

$3B. That's why they blather about "first amendment" when complaining about campaign finance laws. If money=speech, then none of us will have a voice. Imagine T. Boone and all his friends could just run straight ads promoting McCain.

I understand the rational argument, and it makes sense, but I can't help the feeling that this is simply nitpicking on the word "ever". And if they adjust that statement to "most expenisve campaign of the last 100 years", then what? No, imho the most unpleasant problem with arguing that they're wrong is that they really have a point. It's really the most expensive campaign since several decades, that's undeniable. So I think defending the undefensible is useless. This argument has to be countered in another way, imho.

Just my personal opinion. But maybe some OpenLefters have better ideas?

Do we really want anybody to compare Obama to the fat cat capitalists who arguably bought "their" election? Is this a picture we want to spread? Again, only my personal opinion, but I think this puts our candidate in an unflattering light.

Afaik he outspent both Gore and Kerry significantly. Maybe the argument should go that Republicans never saw a problem with spending huge amounts of money as long as they had the advantage. Only now, that the roles are reversed, they complain. Hypocrites!

the first attempts at campaign finance reform were during the Progessive Era, but were largely overturned by the Supreme Court. A lot of those decisions still stand, hence why we have donation limits and not spending limits.

I've never understood why movie success is measured in money from tickets sold instead of simply the number of tickets sold. It drives me crazy.

My first guess is that it's just greed, and they don't really care about the number of tickets, just the $$$. But I also suspect there's an industry desire, for whatever reason, to keep number of actual tickets sold a secret.

The du Pont family by itself paid for 7% of the Republican campaign in the 1936 election. (You can get the full picture in L. Oversacker, Funds in the presidential election of 1936, American Political Science Review, vol. 31, pp. 473-498, 1937.)

Contribution limits do make a difference.

Although it backfired in that election. Here's Jim Farley at the 1936 dem. convention:

Behind the Republican ticket is the crew of the du Pont Liberty League and their allies, which have so far financed every undercover agency that has disgraced American politics with their appeals to race prejudice, religious intolerance and personalities so gross that they had to be repudiated by the regular Republican organization.

That's the convention where Roosevelt accepted the nomination outdoors with his call to a rendezvous with destiny and a battle against economic royalists.

Which could be given today with very little modification and ring just as true.

We had to struggle with the old enemies of peace business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.

Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me and I welcome their hatred.